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Why are the biggest savings in manufacturing found outside the process?

Everyone optimizes the process, but the money is lost elsewhere

In industrial manufacturing, most optimization efforts focus on the production process. Companies invest in machinery, shorten cycle times, optimize CNC programs, and analyze OEE. The problem is that a very large share of costs arises not within the process itself, but in the activities surrounding it.

Overlooked costs outside the production process

Areas such as cutting tools, PPE and safety supplies, and auxiliary materials are rarely analyzed as closely as production processes. This is because these items are dispersed, turn over quickly, and have a relatively low unit value. In practice, consumption is not measured accurately, and purchasing decisions are often based on maintaining safety stock. As a result, companies lose several percent to more than 10% annually in an area that is formally considered under control within the organization.

Why is the process optimized while costs continue to rise?

A production process can be highly optimized while the company still loses money on the supporting operations. This is because process optimization and resource control are two separate areas. A machine may operate at peak efficiency, but if workers stockpile tools and some never return to circulation, costs will continue to rise regardless of how well the production process performs.

An industrial vending machine as a tool for controlling hidden costs

This is where an industrial vending machine comes in. Its purpose is not to improve the production process itself, but to organize the resources that support it. The machine introduces three things that were previously missing: availability, tracking, and accountability. Every withdrawal is recorded, stock levels are updated in real time, and the company gains visibility into actual resource consumption.

Savings that don't require investing in production equipment

The key takeaway is that reducing costs in this area does not require technological changes or major investments in production. Companies simply need to organize how they distribute and control supplies. In many cases, implementing industrial vending machines enables a company to:

It's a rare combination: lower costs and greater efficiency at the same time :)

The greatest savings opportunities are where no one is looking

Production process optimization has its limits. Yet the areas surrounding the process often remain disorganized for years. That is where the greatest potential savings lie. An industrial vending machine does not change how parts are machined, but it does change how resources are managed. For many companies, this proves more cost-effective than investing in another machine.

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Grzegorz Reszka

Grzegorz Reszka
CEO and Founder of JG Group

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